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ELRCPartially Allowednot stated in excerpt· [2024] KEELRC 1024 (KLR)

Guo v Beijing Zhongji Jingu Integrated Housing Technology Company Limited & 2 others (Cause E328 of 2023) [2024] KEELRC 1024 (KLR)

Employment and Labour Relations Court
15 April 2024
NMNzioki Wa Makau
5,148 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~21 min to read original · ~4 min brief

The bottom line

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Kenyan courts, not foreign arbitration clauses, decide employment disputes where the work was done in Kenya.

What this practically means

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Executive summary

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Before the ELRC at Nairobi, Nzioki Wa Makau J dealt with the Claimant's Notice of Motion dated 23rd May 2023 seeking an order of inhibition over LR. No. 1/462/ IR No. 16611/1 in Upper Hill, Nairobi (the Suit Property), and the 1st and 2nd Respondents' Preliminary Objection dated 5th May 2023 and the 3rd Respondent's Preliminary Objection dated 9th June 2023. The Respondents argued the Court lacked jurisdiction because the Labour Contract of 22nd September 2016 chose Chinese law and the Labour Dispute Arbitration Commission/Beijing Arbitration Commission as forum; the 3rd Respondent additionally pleaded exhaustion, prematurity, lack of land jurisdiction, and privity of contract. The Claimant countered that the dispute arose and the contract was performed in Kenya, invoking lex loci laboris and ss. 14 and 15 of the Civil Procedure Act, and relied on authority including United India Insurance and Dede Esi Annie Amanor-Wilks. The Court applied Owners of the Motor Vessel 'Lillian S', held that Article 2 of the Chinese Labour-Dispute Mediation and Arbitration Law applies only to disputes within China, and that since the issues arose and the contract was performed in Kenya, Kenyan law applies and the forum clause is inapplicable. Both preliminary objections were dismissed with costs. On the motion, the Court found the Suit Property is owned by the 3rd Respondent, which had been ordered to place a guarantee before the Court, and that sequestration by inhibition was imperative upon failure to comply. An order of inhibition over the Suit Property was issued pending compliance with the orders of 24th April 2023 and 10th May 2023, with costs of the motion to the Claimant. The Court also noted the Respondents had been in contempt and were heard 'out of pity'. Judgment dated 15th April 2024 at Nairobi.

Key legal issues

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01

Whether the ELRC has jurisdiction notwithstanding the Chinese choice-of-law and arbitration clauses in the Labour Contract

Holding

The Court has jurisdiction. The disputed issues arose in Kenya and the contract was performed in Kenya, so the clause referring disputes to the Labour Dispute Arbitration Commission of China is inapplicable and Kenyan law applies under lex loci laboris.

Reasoning

Article 2 of the Chinese Law on Labour-Dispute Mediation and Arbitration confines that law to disputes arising within the territory of the People's Republic of China. The disputes here arose in Kenya and the Claimant performed his contract in Kenya. Applying lex loci laboris, Kenyan law governs, which defeats the foreign forum clause and the preliminary objections.

p. 8
02

Whether an order of inhibition should issue over the Suit Property

Holding

Yes. Sequestration of the Suit Property owned by the 3rd Respondent is warranted as the consequence of failure to satisfy the Court's orders for a guarantee.

Reasoning

The Suit Property is owned by the 3rd Respondent, which has been ordered to place a guarantee before the Court. Since the Respondents have shown non-compliance with prior orders, an inhibition preserving the property pending compliance is necessary to secure any eventual decree.

p. 8

Legal principles established

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  • Where an employment dispute arises and the contract is performed in Kenya, the lex loci laboris applies and a foreign choice-of-jurisdiction clause referring disputes to that foreign forum is inapplicable.
  • Jurisdiction is everything; a court without jurisdiction must down its tools.

Court orders

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  1. 1.Respondents' Notices of Preliminary Objection dated 5th May 2023 and 9th June 2023 dismissed with costs to the Claimant
  2. 2.Order of inhibition restraining any further dealings, registration and transactions over LR. No. 1/462/ IR No. 16611/1 (Original Number 1/214 and Part of 1/213), to be registered over the Suit Property, pending compliance with the Court Orders of 24th April 2023 and 10th May 2023
  3. 3.Costs of the Claimant's Notice of Motion dated 23rd May 2023 awarded to the Claimant
Jurisdiction invoked
Article 162(2)(a) jurisdiction of the ELRC (implied); dispute resolved under lex loci laboris and Civil Procedure Act ss. 14 and 15

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Guo v Beijing Zhongji Jingu Integrated Housing Technology Company Limited & 2 others (Cause E328 of 2023) [2024] KEELRC 1024 (KLR)", Case Analysis (2024). not stated in excerpt. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/1024/eng@2024-04-15

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.